The report highlights an alarming surge in global public debt and proposes a plan to revamp the global financial system to tackle the current debt crisis.
- Public debt refers to general government domestic and external debt.
Key Highlights of the Report
- Debt surge: In 2023, global public debt reached a historic peak of $97 trillion.
- Drivers: Cascading crises and sluggish and uneven performance of the global economy.
- Regional Disparity: Public debt in developing countries (accounting for 30% of the global total) is rising at twice the rate of developed countries.
- In 2023, India’s public debt reached US$ 2.9 trillion, accounting for 82.7% as a share of GDP.
Implications of high public debt:
- High fiscal burden: More than half of developing countries allocate at least 8% of government revenues to interest payments.
- Decreased developmental spending: 3.3 billion individuals reside in nations where interest payments exceed spending on education and health combined.
- Climate inaction: Interest outweighs climate investments in emerging and developing countries.
Roadmap to finance sustainable development:
- Inclusive International Financial Architecture with increased participation of developing countries in its governance.
- Provide greater liquidity in times of crisis expanding contingency finance through IMF instruments.
- Scaling up affordable long-term financing through transformation and expansion of Multilateral Development Banks.
Initiatives to solve debt crisis:
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